Other analysts coincide with the bank’s strategists in their arguments defending that $ 60,000 is a crucial level for Bitcoin’s bull rally to keep on the top.
Analysts at banking giant JPMorgan warned that the Bitcoin (BTC) market shows weak points after the most prominent cryptocurrency went through a significant correction.
Bitcoin and the entire digital currency market crashed over the weekend after some events collided. An electric power outage in China caused the hash rate of the Bitcoin network to crumble down, and about $ 10 billion of it went through liquidation in the market.
The primary cryptocurrency had hit a new high above $ 64,600 on Wednesday when Coinbase shares hit the stock market. However, the slide caused Bitcoin to slide back to $ 50,000. The largest digital asset was trading around $ 55,000.
JPMorgan is worrying about Bitcoin
JPMorgan analyst and strategist Nikolaos Panigirtzoglou spoke about many concerning situations in the crypto market scenario. In his view, the price of Bitcoin could suffer even more if it does not regain the $ 60,000 ground shortly.
“If the largest cryptocurrency is not able to break above $ 60,000 again soon, the signals of momentum will subside,” The bank’s strategists led by Panigirtzoglou said.
It is also essential to consider that traders, including commodity trading advisers (CTAs) and digital asset funds, were possibly behind the buildup of long BTC futures in recent weeks and the subsequent price crash.
On previous occasions, much of the price action in the past year occurred due to the Bitcoin’ futures’ market, a financial instrument that tracks BTC prices and allows investors to trade high-leverage (borrowing funds as collateral) place large bets.
USD 60,000 is the Needed Level for Bitcoin
The bank’s analysts described the possible adverse effects of this price drop on the main long-term asset. Momentum traces will naturally decrease from now to several months, given their high level.
Although the analysts noted similarities between the latest fixes, they referred to the most recent one as a potential revolutionary event, significantly if Bitcoin doesn’t rebound fastly, as it did months ago. The analysts also added that flows into Bitcoin funds now appear more strengthless.
“It remains to be seen if we see a repeat of those earlier episodes at the current juncture. The probability of something like this to happen again seems minimal because the fall in momentum seems more advanced and, therefore, more difficult to reverse, “they added.
The famous crypto strategist, known on Twitter as Jack Sparrow, recently shared a similar analysis. He observed that a Bitcoin move below the $ 53,500 support risks a selloff until the next support.
Norwegian cryptocurrency-focused research firm Arcane Research stated that users would face first resistance at around $ 58,000, while $ 50,000 should be a strong enough supportive level. This figure used to be resistant in late February and early March but then turned into a supportive figure in late March and this weekend.
There are many similar opinions to the ones that analysts at JPMorgan and Sparrow are currently managing. The researchers noted that a drop below $ 50,000 would be bearish in the short term and could potentially lead to the $ 45,000 level.
By: Jenson Nuñez
